Question: ADRs Versus Direct Holdings. When you are constructing your portfolio, you know you want to include Cementos de Mexico (Mexico), but you cannot decide whether you wish to hold it in the form of ADRs traded on the NYSE or directly through purchases on the Mexico City Bolsa.
a. Does it make any difference in regard to currency risk?
b. List the pros and cons of ADRs and direct purchases.
c. What would you recommend if you were an asset investor for a corporation with no international operations or internationally diversified holdings?